Ouroboros Catalysts Issue #6: FXS Halving, Trader Joe's Merchant Moe launch, DOGE-1 Satellite launch
We first released this article on 12 Dec'23 to Ouroboros Lifetime Access Pass (OLAP) holders who get early access to our writings.
Last issue, we flagged 2 significant upcoming catalysts: 1) GameFi season, 2) AEVO TGE / RBN conversion.
This week, we will be examining the following catalysts:
Upcoming annual FXS halving
Trader Joe to benefit from Merchant Moe
DOGE-1 satellite launch
None of the following is financial advice.
Catalyst #1: FXS halving
Catalyst: FXS emissions are reduced by half every year on 20 Dec. At present, FXS gauges are emitting 6,250 FXS / day (~$55k) or ~$20m annualized. On 20 Dec'23, this will fall by half, suggesting around $10m less emission annually (or 1.5% of market cap). While flows are important, FXS has empirically performed well from the date of halving - the 2021 halving saw FXS rise 2.9x and the 2022 halving saw a 2.5x rise, albeit peaking out at different timings.
Potential Trade Idea: Long FXS into halving
When: 20 Dec’23
What to watch out for: Potential other catalysts include Frax Chain and Borrow AMM (BAMM) launch
Catalyst #2: Trader Joe to benefit from Merchant Moe
Catalyst: Trader Joe has announced Merchant Moe, a DEX to be built on Mantle.
Details include:
Mantle's Primary DEX: Mantle will support Merchant Moe as a leading native DEX in the ecosystem
Immediate TVL: Merchant Moe will receive liquidity support from Mantle's treasury. MIP-28 has approved the use of close to $1.2b of capital to provide liquidity to dapps
Rewards JOE holders: 2.5% of MOE will be distributed upfront to JOE holders who move their tokens to Mantle and deposit their tokens in mJOE staking. 5.0% gets distributed over a year to JOE holders over a year.
Features: Merchant Moe will feature Trader Joe's concentrated liquidity model (Liquidity Book) as well as staking (sMOE), a new gauge voting and bribe system (veMOE).
Merchant Moe is almost guaranteed success (from a TVL perspective) given Mantle will use a portion of its $1.2b treasury to support liquidity. We think it is somewhat unlikely to see Mantle treasury sell potential emissions farmed, which should help with a tight MOE supply.
While a 7.5% airdrop in total to JOE holders is not quite like Aerodrome's 40% airdrop to Velodrome, we still expect to see JOE lockups to reduce JOE supply and result in tighter JOE supply, and potentially causing upward price pressure.
Potential Trade Idea: Long JOE on pullbacks. JOE is currently benefiting from AVAX ecosystem strength which is largely driven by memecoins. We expect this to fade and will be watching out for entry opportunities.
When: Unknown, likely in the following weeks.
What to watch out for: Further details on staking tokenomics, timeline on Merchant Moe launch.
Catalyst #3: DOGE-1 Satellite Launch
Catalyst: The DOGE-1 satellite is set to launch after over two years since its announcement in May'21 by Elon Musk. Fully funded by DOGE tokens, the project aims to launch aboard a SpaceX Falcon 9 rocket on 12 Jan'24.
The satellite, developed by space technology firm Geometric Energy Corporation (GEC), has finally received a regulatory approval from the National Telecommunications and Information Administration (NTIA) on 28 Nov'23. Two days later, the Federal Communications Commission (FCC) granted GEC its final license for the mission. GEC has two associated tokens - GEC and XI, which we think makes GEC unlikely to be a highly legitimate space tech company.
Potential Trade Idea: Short DOGE on launch date. DOGE is up close to 40% since the start of Nov'23 and we think the move up is largely priced in. That said, we expect this event to mirror Elon Musk's appearance on Saturday Night Live (SNL) in 7 May'21 which saw a blow off top afterwards.
When: 12 Jan’24
What to watch out for: We would caution against premature shorting and would prefer to wait until the catalyst or after for an entry.
Prior Issues
[30 Nov'23] Issue #5: GameFi Season, AEVO TGE / RBN Conversion (Link)
[15 Nov'23] Issue #4: End of Blur season 2, CoW Swap fee switch (Link)
[8 Nov'23] Issue #3: Upbit conference, Hashflow token unlocks, Butter Finance impact on AURA (Link)
[31 Oct'23] Issue #2: Aptos unlocks $177m monthly, Nearcon 2023, FTX estate sales (Link)
[23 Oct'23] Issue #1: Solana Breakpoint, Lido sunsets Solana staking, Polkadot crowdloan unlocks (Link)
Solid as usual